North Carolina looks to scale back on their film tax credits; Hollywood doth protest

posted at 2:01 pm on September 1, 2013 by Erika Johnsen

Last February, Glenn Reynolds wrote a great piece on the many elitist Hollywood liberals that are all too content to deride the insatiably and ignobly greedy tactics of other, more pedestrian industries and lecture on the need for everyone to contribute their “fair share” in taxes to the good of society, and yet are simultaneously very glad to seek out the highly generous tax breaks that the move industry receive from states across the country to incentivize Hollywood productions to set up shop there.

The WSJ reports that the sorts of state subsides and incentives to which Reynolds referred have recently been declining somewhat as states shift their post-recession priorities to more pressing fiscal matters, and that North Carolina is a heartbeat away from winding down one of its most extensive programs for awarding tax breaks to film companies — much to film interests’ chagrin.

The Motion Picture Association of America says the quality of the state’s studios and film crews rival those found in Hollywood and New York City. The state trails only California, New York, Georgia and Louisiana in production revenue, according to the N.C. Film Office.

But the budget for the next two fiscal years approved in July by the state legislature lets the incentive program sunset on Jan. 1, 2015. …

“We spent $70 million on film incentives last year, and what else could we have done with that $70 million?” said Rep. Mike Hager, the GOP majority whip, who hails from Rutherford County, where “Dirty Dancing” was shot. “We could have paid more teachers, kept our teacher assistants, given raises to our highway patrol.” …

Most states pay a subsidy worth about 25 cents for every dollar of production expense, return on investment is hard to quantify, and the highest-paying jobs go to people out of state, says the left-leaning Center on Budget and Policy Priorities in Washington.

The Motion Picture Association of America says film incentives have a multiplier effect, citing a recently commissioned study that shows North Carolina’s $20 million in incentives last year for “Iron Man 3″ led to $180 million in local spending, or nearly $9 for each $1 invested.

Questionable, and the overarching point is that the big names of Hollywood are so often all too happy to consider themselves a cut above the oh-so-disdainful operations of other perfectly rational, profit-seeking businesses in other industries while reaping the benefits of special government treatment at average taxpayers’ expense.

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I’ve never bought into the idea that such subsidies are good public policy. At best they bring a temporary boost in income for some businesses. But a $70M investment in infrastructure is a better deal for the NC taxpayers.

North Carolina is a heartbeat away from winding down one of its most extensive programs for awarding tax breaks to film companies — much to film interests’ chagrin.

I can’t wait to see the Hollywood hissy fit over subsidies drying up. After a summer of stinkers they probably aren’t all that thrilled that those saps in NC are finally wising up to the scam they’ve been pulling.

“We spent $70 million on film incentives last year, and what else could we have done with that $70 million?” said Rep. Mike Hager, the GOP majority whip, who hails from Rutherford County, where “Dirty Dancing” was shot. “We could have paid more teachers, kept our teacher assistants, given raises to our highway patrol.” …

How about NOT SPEND IT! How about drop that $70 million off the expenditures side and lower taxes so the people don’t have to pony up $70 million dollars!

We spent $70 million on film incentives last year, and what else could we have done with that $70 million?” said Rep. Mike Hager, the GOP majority whip, who hails from Rutherford County, where “Dirty Dancing” was shot. “We could have paid more teachers, kept our teacher assistants, given raises to our highway patrol.” …

I doubt it. Because lower taxes increase activity. Not that surprising that a GOP rep wouldn’t understand this.

How shocked should we be to hear a GOP rep sound exactly like a Democrat when talking about a tax he wants to hike? GOP and Dems both have their cronies. How about we get a low tax for everyone (and limit the size of the government) and let the market pick the winners and losers?

I very happy with the decision of the North Carolina Republicans for two reasons. First, the move shows a reluctance to play the Democrat’s socialism game where some lucky (that is, politically connected) industry gets a tax benefit because some chucklehead thinks up some pretense that the industry deserves aid. For instance, even as an environmentalist, I loathe the economic incentives to alternative energy firms because they are socialism pure and simple–and these tax incentives for Hollywood are not really any different from them. A government should strife for low tax rates for everyone, not the lucky ones!
Second, Hollywood is our enemy. We should do nothing to help it. I am all in favor of not protecting their intellectual property. If they want socialism so bad, let the product of their work be the first things socialized!

Time to pay your fair share HollyWood!@!!! You ‘ll tell us surfs how wonderful it is for the rich to pay in… well now your part of that group no more exemptions for you anymore ! Time to practice what you preach!

Anyways I have felt such things do help grow and keep stuff stimulated… but maybe these GOP are finally using the liberal line of thinking and then using it on the very people who think its all cool to raise taxes… for the kids and police and stuff..

We need a few more of the 30 Republican governors to make this statement. Stop the rent-seeking deals, remove regulations, lower taxes and we’re on our way back. Of course, the Democrat Senate and President must also be replaced. The Senate, 2014 – the sooner the better.

To those saying “$70M? What could you do with it? How about give it back?” To be fair NC republicans did do just that in the form of lowering of personal and corporate taxes, with a plan to lower them even further if revenue targets are met. They also have started to deal with 22000 regulations in the books in NC. So even thought far from perfect the NC branch of the republican party is at least acting on what they ran on.

As to the Film=Jobs (that is the bumper sticker here, especially in Wilmington, I think it came from Susi Hamilton(d)), I say this: Landscaping= Jobs, where is their inventive money. I would bet that the landscaping industry in NC dwarfs the Film industry.

Last February, Glenn Reynolds wrote a great piece on the many elitist Hollywood liberals that are all too content to deride the insatiably and ignobly greedy tactics of other, more pedestrian industries and lecture on the need for everyone to contribute their “fair share” in taxes to the good of society, and yet are simultaneously very glad to seek out the highly generous tax breaks that the move industry receive from states across the country to incentivize Hollywood productions to set up shop there.

That’s the best idea Instapundit ever had, and Instapundit has a lot of good ideas.

Repeal the Hollywood tax cuts!

In total, everywhere.

This is not an industry you want free to push for socialist (“pay your fair share”) tax rates for everybody else while itself enjoying teacher’s pet status and never appreciating how much real tax rates hurt.

Every vapid Hollywood start who is sure the little people ought to live under heavy government control while the stars themselves stay special snowflakes is evidence of that.

thuja on September 1, 2013 at 2:53 PM: A government should strife for low tax rates for everyone, not the lucky ones!

This.

thuja on September 1, 2013 at 2:53 PM: Second, Hollywood is our enemy. We should do nothing to help it. I am all in favor of not protecting their intellectual property. If they want socialism so bad, let the product of their work be the first things socialized!

And this too.

It’s so simple. Conservatives should have been pushing for this for decades.

Last February, Glenn Reynolds wrote a great piece on the many elitist Hollywood liberals that are all too content to deride the insatiably and ignobly greedy tactics of other, more pedestrian industries and lecture on the need for everyone to contribute their “fair share” in taxes to the good of society, and yet are simultaneously very glad to seek out the highly generous tax breaks that the move movie industry receive receives from states across the country to incentivize Hollywood productions to set up shop there.

No idea why some people think raising taxes to spend more money on teachers is the “not socialism” position here. Sure, the structure of the taxes is cronyism – so restructuring the taxes so that the people benefit, rather than a preferred industry is the “not socialism” approach here. Not what these clowns are talking about.

The WSJ reports that the sorts of state subsides and incentives to which Reynolds referred have recently been declining somewhat as states shift their post-recession priorities to more pressing fiscal matters………….

Not too sure it is post recession yet, but that’s only from seeing higher unemployment, more food stamps, less people in the job market, etc. Just my opinion though.

We North Carolinians are THRILLED that the tax breaks for rich Hollywood types are being discontinued. Hollywood produces mostly unwatchable crap these days and we are tired of subsidizing movies that we wouldn’t watch if they were free.

David, I won’t argue the point with you, you are wrong for the wrong reasoning. Lower taxes draw business every time its tried. Remaining competitive is a bottom line. Without competition in the lowering of taxes socialists win. Long game.